Tom Watts
@altfinance.bsky.social
Investment Analyst. Money Manager. Idaho to Wall Street strategist. HBS. McKinsey. Merrill. Uncovering the facts behind conventional wisdom. Run, bike, ski, and hang out with dog Buddy.
The Fed’s higher short-term interest rates are meant to reduce economic growth which often reduces inflation. Frequently, the higher short-term interest rates slow the economy so much, that the economy goes into recession.
It’s not clear that will happen this time. But, this chart suggests it will.
It’s not clear that will happen this time. But, this chart suggests it will.
January 5, 2025 at 10:08 PM
The Fed’s higher short-term interest rates are meant to reduce economic growth which often reduces inflation. Frequently, the higher short-term interest rates slow the economy so much, that the economy goes into recession.
It’s not clear that will happen this time. But, this chart suggests it will.
It’s not clear that will happen this time. But, this chart suggests it will.
Yield curve inversion is when short-term rates are higher than long-term rates. This generally happens when the Federal Reserve raises short-term interest rates to try to slow inflation. The Fed manages the interest rate for overnight lending to banks, so it is very short term.
January 5, 2025 at 10:08 PM
Yield curve inversion is when short-term rates are higher than long-term rates. This generally happens when the Federal Reserve raises short-term interest rates to try to slow inflation. The Fed manages the interest rate for overnight lending to banks, so it is very short term.
Normally long-term interest rates are higher than short-term interest rates. For example, the interest rate on a 10-year bond is higher than that for a 1-year bond. The issuer must offer that to the bond holder, because the bond holder is taking more risk locking up their money at a given rate.
January 5, 2025 at 10:08 PM
Normally long-term interest rates are higher than short-term interest rates. For example, the interest rate on a 10-year bond is higher than that for a 1-year bond. The issuer must offer that to the bond holder, because the bond holder is taking more risk locking up their money at a given rate.